On Thursday, the shopping centre giant bought $279 million of stock, accounting for 75 per cent of all the Westfield securities traded on the day.

It was the largest single day of the buyback, according to Goldman Sachs analyst
Simon Wheatley
.

Westfield unveiled plans to buy back 10 per cent of its stock in February 2012 and this year gained approval from security holders to buy 5 per cent more.

Launching the initiative, joint chief executive
Peter Lowy
said the buyback was “part of our capital strategy, along with the redeployment of capital into the redevelopment pipeline and the expansion of our business".

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By selling assets, boosting management and development fees and reducing the stock, the group aims to become a new, higher-return ‘Westfield-light’.

The group has achieved its first 10 per cent buyback target. But the pace of recent buying has raised eyebrows.

In the 18 months to August 2013, the group bought back $1.44 billion worth of stock, according to Goldman Sachs.

Since reinstating the buyback in September, Westfield has bought another $948 million worth.

Focus on ‘fortress’ malls

“Since recommencing the buyback in mid-September 2013, Westfield Group has accounted for 30.4 per cent of daily volume on average and, including Thursday, over 50 per cent of total volume on three occasions," wrote Mr Wheatley.

Westfield did not comment on why the buyback had been increased. Mr Wheatley attributes the move to the need to reduce the dilutive effect of the sales of non-core malls in the US.

The aim is to focus on super-prime “fortress" malls, but the immediate impact is a loss of income because the high yield from the malls being sold cannot quickly be replaced.

Westfield advised that the last sale would dilute funds from operations by 4.5¢ (6.8 per cent) before reinvesting the money in higher-return shopping centre redevelopments.

“Our view is that a 10 or 15 per cent buyback does not meaningfully alter earnings leverage for Westfield Group and that we would not be surprised if Westfield continued extending the buy-back with an ultimate aim to buy back 30-40 per cent of stock on issue over the next several years," wrote Mr Wheatley.

Goldman Sachs has a sell on the stock, but other analysts disagree.

In a recent note, Deutsche Bank wrote that the current price did not “capture the earnings benefit to Westfield as key projects drive an increase in this level of activity over FY15-17".